OneBlinc, the ‘challenger bank’ that received US$ 10 million from Bradesco’s CVC
- July 4, 2022
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Eight years ago, when he arrived in Miami, Florida, Fabio Torelli had already done a little bit of everything in the Brazilian financial sector, especially in the credit market, with stints in citi, Santander and MasterCard. But when he landed on Uncle Sam’s land, he realized that there was a lot to be done in terms of access to credit. In fact, the executive himself had difficulty getting his first credit card in the country, with a “decent” limit.
“If you have a score below 700, you are out, and your life will be difficult to have access to credit products”, explains Fabio, in an exclusive interview with Finsiders. “I lived it as an immigrant. My initial credit card limit was $500. I was in the algorithm’s blind spot. So I thought, ‘There must be more blind spots,’” she says.
At the time, head of products at Bmg money — which grants credit to public servants in the US —, Fabio packed his bags for Silicon Valley to learn about technologies and new business models, and came across the plaida platform focused on Open Banking that is now worth more than US$ 13 billion.
“There in Plaid, I got to know Open Banking on a daily basis. Until, in 2018, I started thinking about a ‘new venture’, having Open Banking as a foundation”, recalls the former executive and entrepreneur for four years.
It is he who is at the head of the OneBlinca fintech that wants to challenge the ‘status quo’ of personal credit for the low-income population in the North American market.
The thesis is to offer healthy, responsible, conscientious and non-predatory credit, initially focusing on public servants and health professionals. — segments that normally have low turnover, explains Fabio.
The persona of OneBlinc, exemplifies the entrepreneur, is a woman over 40 years old, with three children, who earns three minimum wages and does not have a credit card, and will probably do some odd jobs to supplement her income in the month. In general, they are people from social minority groups, such as blacks, and communities, such as Latinos.
Fintech started by offering a payroll discount loan, then pivoted to a salary advance modality. Today, it also offers a checking account, savings account, debit card co-branded with MasterCardin addition to cashback, rewards program and marketplace with around 80 partner brands.
Since the beginning of the operation, OneBlinc has already released more than R$ 700 million in personal creditwith the intention of doubling the volume originated in credit in the next 12 months.
Today, fintech has a base of around 60,000 customers – up from 25,000 at the end of last year. The expectation is to reach 200 thousand by the end of the year and reach the important goal — repeated a few times by Fabio during the interview — of 1 million account holders. “I think 24 months is a doable timeframe for that,” he says.
To scale, the fintech just raised $10 million with the inovaBra Venturesthe Corporate Venture Capital (CVC) fund of Bradesco which adds up to more than 14 invested startups, among them, agrosmart, wings and smartbrain.
“Our investment thesis at OneBlinc is based on 3 pillars of the American economy: 1. being positioned in counter-cyclical businesses; 2. optimize companies using alternative data for credit decision making; and 3. expand data capture and management, increasing more and more the processing capacity and construction of new risk models”, explains Rafael Padilha, director of Bradesco PE & VC.
inovaBra Ventures opens a Series A round, which can reach US$ 20 million with the participation of individual investors and an undisclosed Brazilian VC.
“When we did the seed round in 2020, we basically put the money into technology. We went from six to 50 developers”, says Fabio. “We arrived at this round already robust from a technology point of view. Now it’s basically growth, marketing, some one-off, important hires.”
Between pre-seed and seed money, OneBlinc had already raised around US$ 8 million, including contributions from angel investors, the famous ‘family and friends’, in addition to the founders’ equity.
In the captable, there are experienced executives and former executives, among them, Jose Luiz Acar (former president of Banco Pan and former VP of Bradesco); Jose Flavio RamosCEO of BR Partners; Alvaro Augusto de Freitas Vidigalthe ‘Guti’, CEO of singular Invest (formerly Socopa) one of the heirs of Banco Paulista; Claudio Amadeo Rodriguez (former JUS Capital and Gávea); Frames Lutz, president of Grupo Ultra; and Pedro fields (formerly Morgan Stanley and JUS Capital).
Like any startup, which needs to accelerate the ‘time to market’, OneBlinc has several partners, among them, plaida MasterCard and the synapseas a provider of banking services and products infrastructure — a North American company that has just landed in Brazil, inclusive.
To originate credit, fintech started with equity and evolved into funding structures through undisclosed providers. “We have a US$ 20 million line and now we have made a deal to access US$ 100 million for funding”, says Fabio, without revealing the details.
The size of the market gives clues to OneBlinc’s growth potential and, of course, that caught Bradesco’s attention. According to a 2019 study by the Center for Financial Services Innovation (CFSI), more than 90 million Americans do not have access to credit. already according to the Federal Reservenearly 20% of the population in the US is considered unbanked or underbanked.
“We have been working with Open Banking for eight years. We have access to 170 million payslips in the US. If you have a payslip and a checking account, we can get our hands on the dice and do a good credit analysis,” says Fabio. “Through Open Banking, we have more than 200 million banking transactions processed on AWS (Amazon’s cloud), and learning from the model, using machine learning. It’s exponential.”
He cites that his focus is the North American market. “We don’t want distraction. We’ve already done a pilot in Mexico, but we’re ending it because now we’re on a mission to reach 1 million account holders in the US.”
When talking about focus, the entrepreneur also refers to the target audience. Today, OneBlinc serves public servants and healthcare professionals well. Therefore, the idea is to gain even greater space in these segments, and then seek new niches, such as low-income workers in the private sector. “We still have a tall grass in the public sector, but we are already expanding to the private sector, but with responsibility because the indicators are of economic recession.”
This is how OneBlinc wants to evolve in its mission to challenge the status quo, serving with “dignity and respect”, in Fabio’s words, the low-income public that does not have access to financial services, including credit.
A long journey that will certainly not be done in a “blink of an eye” — the expression that gave rise to the name of the company —, but always with the objective of solving the “blindspot” (blind spot) of access to credit.